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Cost per unit of output is called Average Total Cost (AC) AC = TC/Q where Q is quantity of output Fixed cost per unit of output is called Average Fixed Cost (AFC) AFC = TFC/Q Variable cost per unit of output is called Average Variable Cost (AVC) AVC = TVC/Q Marginal Cost is the change in the total cost when an additional unit of output is produced. We use TC = 50000 + Q As an exercise, change the fixed costs or TC equation in the excel sheet below.